Saint Consulting Group, Inc. v. Endurance American Specialty Insurance
699 F.3d 544
1st Cir.2012Background
- Saint sues Endurance for failing to defend in Rubloff Action; Endurance relied on Exclusion N to deny coverage.
- Rubloff Action accuses Saint and SuperValu of anticompetitive conduct to block Wal-Mart via deception and litigation strategy.
- Policy requires Endurance to defend for Wrongful Act within period, but Exclusion N bars claims arising from price fixing or restraint of trade.
- Massachusetts law governs interpretation; exclusionary provisions are strictly construed and apply based on the complaint's allegations.
- Second Amended Complaint includes antitrust and non-antitrust claims tied to the same alleged scheme; district court held Exclusion N covers all such counts; no coverage for backup claims (negligence, estoppel, etc.).
- Court affirmed dismissal and held Exclusion N precludes coverage for all counts arising from the alleged anti-competitive scheme; Noerr-Pennington arguments do not defeat Exclusion N.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Exclusion N bar coverage for Sherman Act counts in the Second Amended Complaint? | Saint contends exclusion should not apply to non-Sherman Act claims. | Endurance argues exclusion applies to any claim arising from the anti-competitive scheme, including broader counts. | Yes; Exclusion N bars those counts. |
| Does Exclusion N extend to non-antitrust claims based on the same facts (e.g., RICO, fraud)? | Saint argues some counts are not labeled antitrust and thus may be covered. | Exclusion N covers any claim based on or arising out of a restraint of trade, regardless of labeling. | Yes; Exclusion N applies to counts arising from the same anti-competitive scheme. |
| Do backup claims (negligent spoliation, estoppel, etc.) salvage coverage? | Saint maintains some backup claims may trigger defense. | Exclusion N and contract terms preclude coverage for these theories. | No; these backup theories fail to create coverage under the policy. |
| Is Noerr-Pennington relevant to defeating Exclusion N? | Saint cites Noerr-Pennington as shielding conduct from antitrust scrutiny. | Exclusion N focuses on the complaint's allegations, not Noerr-Pennington defenses. | No; Noerr-Pennington does not nullify Exclusion N. |
Key Cases Cited
- Fuller v. First Financial Insurance Co., 858 N.E.2d 288 (Mass. 2006) (arising-out language broad; excludes related negligent claims)
- Bagley v. Monticello Ins. Co., 720 N.E.2d 813 (Mass. 1999) ('arising out of' read expansively in exclusions)
- Med. Records Assocs. v. Am. Empire Surplus Lines Ins. Co., 142 F.3d 512 (1st Cir. 1998) (professional services policy; coverage scope; ordinary activities not covered)
- Sterilite Corp. v. Continental Cas. Co., 458 N.E.2d 338 (Mass. App. Ct. 1983) (exclusionary scope; determine coverage based on allegations)
- E.R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127 (Supreme Court 1961) (Noerr-Pennington doctrine; litigation to stifle competition not protected in all contexts)
- United Mine Workers v. Pennington, 381 U.S. 657 (Supreme Court 1965) (Noerr-Pennington development; sham exception)
- Open Software Found., Inc. v. U.S. Fid. & Guar. Co., 307 F.3d 11 (1st Cir. 2002) (tendered complaints determine coverage where multiple amended pleadings exist)